Zhong Guo Zheng Quan Bao·2025-12-02 20:22Market Overview - As of November 28, 2025, the Hong Kong Stock Exchange has 2,664 listed companies with a total market capitalization of approximately HKD 48 trillion [1] - The Hang Seng Index and the Hang Seng Tech Index have increased by 29% and 25% respectively this year, indicating significant market rotation [2][3] - The overall valuation of Hong Kong stocks is currently within a reasonable range, with a focus on scarce assets such as internet leaders and innovative pharmaceuticals [1][8] Market Structure - The market is characterized by a high concentration of value in large-cap companies, with 65% of companies having a market cap of HKD 0-20 billion, but only accounting for 1.80% of the total market capitalization [2] - Institutional investors dominate trading, contributing 85% of the transaction volume, with international investors making up 60% of the market [1][2] Valuation Insights - The AH premium index is currently at 121, which is historically low, indicating that Hong Kong stocks are not significantly overvalued nor is there substantial room for valuation recovery [3] - The valuation of the Hang Seng Index is at a historically high level compared to the CSI 300, while the Hang Seng Tech Index remains relatively low in absolute valuation terms [3] Asset Highlights - Key scarce assets in the Hong Kong market include internet leaders, innovative pharmaceuticals, new consumption, and dividend stocks, while high-end manufacturing is relatively weak [4][7] - Internet leaders like Tencent and Alibaba are seen as core highlights, with significant capital expenditures and a strong user ecosystem [4][5] - The innovative pharmaceutical sector is viewed as a "first-tier market" with a higher "innovation content" compared to A-shares, benefiting from favorable listing rules for biotech companies [5][6] Investment Dynamics - The investor structure is increasingly international, with a notable inflow of southbound funds, which have reached a cumulative net inflow of HKD 13,820 billion this year, a 90% increase year-on-year [7][8] - Despite the presence of quality assets, the market has passed the high-return investment phase, and the uncertainty of incremental capital inflows suggests a mixed outlook for future market performance [8]